The thesis that Pemex is far from being self-sufficient is reaffirmed. The contributions of the federal government to the oil company in 2021 exceeded the amount of taxes that it paid to the Ministry of Finance during the past year.
The state company received government transfers for 316,354 million pesos. While the taxes he disbursed totaled 309,607 million pesos, according to his financial report published on Monday.
The transfers include equity contributions to cover their debt repayments and transfers for the construction of the new refinery in Tabasco. Without taking into account the fiscal stimulus due to a reduction in the Shared Utility Right, the main tax paid by the oil company.
The company’s financial results report for the fourth quarter of the year reveals that during 2021 Pemex received five equity contributions to cover the payment of its debt, for a total of 202,568 million pesos. The highest transfer was made just last December for a little more than 73,000 million pesos.
Also in 2021, as part of the scheduled expenses for the construction of the Dos Bocas refinery, it received 113,785 million pesos.
The federal administration decided to take over the amortization of the company’s debt since last year and since the beginning of the six-year term announced a reduction in the payment of the Shared Utility Right, better known as the DUC Rate, a tax paid by the company for oil extracted and marketed.
Last year, the reduction of the DUC meant around 73,000 million pesos. Thus, in total during 2021 the company’s support could be estimated at more than 389,000 million pesos.
One of the arguments of the federal government and the administration of the state company to continue with this resource transfer strategy is based on the fact that the oil company gives the State a greater amount of resources to the public coffers.
Pemex reported yesterday at its conference with investors that it did increase the amount of taxes it paid to the Treasury in 2021, due to the recovery in oil prices, but the amount -309.607 million pesos- was less than the support received. A year earlier, in 2020, the taxes paid by the oil company were equivalent to 185.572 million pesos.
The administration of the state company has assured on different occasions that the current tax burden prevents it from improving its financial situation, something that has also been pointed out by some risk rating agencies. Hence, the administration decided to progressively reduce the DUC rate. While in 2019 this was 65%, for this year it is raised to 40%.
Pemex received resources from the Treasury again last January, the oil company’s representatives said at the conference with analysts, but did not offer more details.
Until now, the support policy has still had little effect on the company’s finances, but it has given bondholders a kind of security over their investments.
A large part of the transfers is aimed at reducing the oil company’s debt, but during the past year it barely decreased by 0.7% to 109,000 million dollars, according to its latest financial statement.
The Moody’s rating agency estimated, in a report from last December, the 2021 transfers from the public treasury to the oil company at around 19,000 million dollars, between capital injections, debt payment and tax reductions.
The market expects the oil company to continue receiving financial support from public finances during the next three years of the six-year term, despite the fact that the initial plan was that this would only be extended during the first three years and that after that, the oil company’s resources would help fund some of the federal projects.
But despite this, some investors and agencies, such as Moody’s, estimate that the company still continues with weak metrics, little investment capacity and a high level of debt.
Yesterday Pemex published its financial statement for 2021. The state-owned company reported a significant increase in its debt,
